One quarter of US households do not have a banking account. And not surprisingly, the far majority (if not all) of these households are comprised of the working poor. These are the folks who live paycheck to paycheck and are often unable to maintain the minimum balance required by banks, credit unions, and other lending institutions to keep a permanent account open.
That means when it’s time to cash a check or conduct any other kind of financial transaction, alternative banking services are their only option. What’s an alternative banking service? Often, it’s a dingy room where “tellers” sit behind bulletproof glass and the “lobby” smells like a mix of urine and bleach. Metal benches and neon signs are the only attempt at decor. Meanwhile, promises of checks cashed without ID and payday loans abound. It’s not really what many would consider an ideal place for banking.
Worst of all, these types of check-cashing and wire-transfer providers are renowned for predatory practices that can include exorbitant interest rates and hidden fees. These are not “friendly neighborhood banks” where tellers remember your name and personal bankers help you manage your assets. But for the working poor, there are few other options.
So how cool is it that a new company Mango wants to provide a radically new option that’sbringing a little bit of honesty (and a whole lot of aesthetic) to a notoriously shady industry. Mango offers both onsite and online services that challenge the way in which this demographic handles its financial transactions — and the way they’re treated while doing so.
Customers pay a one-time $10 fee that lets them “cash” as many checks as they want by transferring the money to a bank-issued debit card. And unlike other financial institutions that respond to online applications with a curt “look for a response from us by mail in 7-10 days,” Mango’s online application automatically ships a plastic card and issues a virtual one that can be used immediately. Offline, the Mango Store itself boasts spacious and inviting interior and offers self-service kiosks as well as finance coaches who can help customers with the Mango ATM technology and more broadly, with their finances.
The number of households not currently served by mainstream financial institutions is sizable, and Mango seems like it stands to command a very large market. And given the convenience of its terms and low fees, it may well have the potential to give the mainstream financial institutions a run for their, well, money. The hard part is really going to be convincing those individuals who’ve long operated on the fringes of banking to get in the door. In a weird way, this large customer base that has conducted its financial transactions across bulletproof glass and have grown accustomed to being seen as untrustworthy, might ironically be skeptical to see Mango as a trustworthy banking alternative.